The sources of transaction data and their subsequent flow into the ledger are considered before the presentation of a more detailed description of the recording processes. In practice, an initial record of each transaction, or a group of similar transactions, is evidenced by a business document such as a sales invoice, cash memo, cheque counterfoil, cash register tape. On the basis of the evidence provided by the business document, the transactions are entered in chronological order in a journal. The amounts of the debits and the credits in the journal are then transferred or posted to the accounts in the ledger. The sequences of event leading to postings to the ledger may be diagrammed as follows:
Entry Entry
Business Business recorded in posted to
TRANSACTION DOCUMENT JOURNAL LEDGER
occurs prepared
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